South32 to fund an initial $US1.5M of exploration over at least 5 AusQuest copper, zinc and nickel projects -- 3 in Australia and 2 in Peru -- as part of a global strategic alliance agreement.South32 has already identified the Blue Billy Project in Western Australia as a drill-ready opportunity on which it will spend $US4M for 70%.

S32 has posted a strong turnaround to an attributable profit of $US620M for the Dec half (H1FY17) from its $1.7B loss in H1FY16, credited by CEO Graham Kerr to stronger commodity prices and the BHP Billiton spin-off's disciplined strategy. The result was achieved on revenue from continuing operations that rose to $3.2B (H1FY16: $2.9B).The company generated free cash-flow of $626M, ending the period with net cash of $859M. CEO Graham Kerr announced S32's first interim dividend of 3.6cps, for $192M.

S32 is relying on higher grades over the next 6 months to meet guidance at its Cannington project in Qld, Australia after weak production in the Dec half (H1FY17). Payable zinc production rose 1% to 42,100t while silver fell 27% to 8.7Moz and lead fell 24% to 73,900t, but S32 maintains FY17 guidance at 19.05Moz Ag, 163,000t lead and 80,000t Zn as it moves into a higher grade stope.CEO Graham Kerr says, after a challenging Dec qtr, S32 remains on track to meet production guidance for most of its operations.

Despite stabilising ground conditions at the Appin Area 9 longwall, S32 has again lowered production guidance at its Illawarra Metallurgical Coal operation in NSW, Australia as work continues to recondition the maingate roadway to ensure safe extraction of the 901 panel. S32 continues the ramp-up of production at Appin Area 7 to maintain safe gas levels.

Australia's South32, the mining company spun off from BHP Billiton in 2015, will avoid buying thermal coal because of uncertainties over demand linked to climate concerns, Reuters reports."Metallurgical (coking) coal is attractive long term. Because of uncertainty around carbon prices, because of uncertainties around climate change, we're not going to buy or develop new energy (thermal) coal," says South32 CEO Graham Kerr.

World No 1 private sector coal company Peabody says the sale of its Metropolitan Colliery to South32 is not a retreat from the Australian sector but a strengthening of its portfolio down under.President-CEO Glenn Kellow says the transaction - for $US200M plus a contingent 50%-share of profits from rising coal prices for 12 months and the release from $A20M in financial assurances - will be value accretive for Peabody as it pursues a smaller but more profitable Australian portfolio by delivering meaningful proceeds, reducing future capital needs and reducing risks.